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Hubris or Competence? Herr Piëch and Volkswagen

More than anyone else, Chairman Ferdinand Piëch is the person responsible for Volkswagen’s success in the last ten years. It’s a conglomerate of nine brands, the largest carmaker in Europe, second-largest in the world, and is now challenging Toyota to be number one in world sales.

“An aggressive and demanding manager,” as one bio has it, Piëch and his team have made no bones about their plans to be tops in 2018. They will need to sell 800,000 cars in the U.S. to do that, and the prospects for it aren’t too good.

A recent piece in Autoweek laid out some of the challenges, and there is another thoughtful critique here.

Here is mine, in shorter form, so you can penetrate the fog of corporate PR that will surely emerge in the coming years. The company is committing $71 billion over five years to achieve its goal, an enormous amount, and maybe they can do it.

Piëch has more than ego; he is a great engineer, has created some of Porsche’s best race cars, and knows how to build car companies. Three years ago he turned aside a coup attempt from Porsche head Wendelin Wiedeking to take over VW. His public firing of subordinates is legendary.

“Ach, Viedeking is oudt, Porsche is mein!” (He says stuff like this all the time.)

Well, the takeover will probably happen, but there are problems with Porsche debt.

Volkswagen is legendary not only for stressing its vaunted German engineering, but for taking a “we know best” attitude about what goes into its cars. Continuing complaints from consumers about arrogant, unresponsive dealers and a pervasive reputation for poor quality and cheapening its cars (e.g., the 2011 Jetta) have created negatives that will not be easy to overcome.

Add to all this a history over the last several years of really poor advertising, with weak and inconsistent messaging, and you can see why there are plenty of skeptics out there about VW’s plans.

The company still builds some really good cars, like the new Touareg TDI, reviewed here, and maybe can bring back some of its glory days in the U.S. with a microvan like the Bulli (right).

The wildcard, of course, will be Herr Piëch himself. As others have learned, it’s not usually wise to bet against him.

Do you think Volkswagen can become the world’s largest carmaker by 2018?